GEP Outlook 2021: Supply Chain & Procurement Report
GEP, a leading provider of procurement and supply chain strategy, software and managed services to Fortune 500 and Global 2000 enterprises worldwide, has released its GEP Outlook 2021: Supply Chain & Procurement Report.
The report examines the turbulence caused to supply chains during 2020 and looks ahead to the priorities for 2021 and beyond. The new playbook gives guidance on navigating uncertainty, mitigating risk, optimizing costs and driving growth.
“GEP’s 2021 Outlook Report examines why supply chains bent and frequently broke in 2020 in the face of wild swings in consumer demand, trade wars, tariffs, increasing environmental devastation, social inequality and lockdowns,” says John Piatek, GEP’s vice president, consulting, consumer goods and retail, and chairman of the firm’s Thought Leadership Council.
“This report provides companies with a new playbook to come to grips with a post-pandemic cost structure and supply chain uncertainty.”
Supply chain and procurement trends for 2021
The report includes valuable insight on:
- New Playbook – eight essential strategies to build resilience, navigate uncertainty and create advantage as a competitive differentiator
- Global Business Trends – lessons from 2020, the major changes in political and economic policies and their implications for business leaders
- Technology and Operations Disruptors – technologies transforming and automating supply chains, and unifying finance and procurement
The executive summary of the report says that while there are inevitably challenges still to come, there is optimism that better times are around the corner. It also highlights how supply chain resilience requires a fundamental shift in the approach to collaboration, with a focus on an ecosystem of partners and transparency.
Sustainability, diversity and inclusion are also high on the 2021 agenda.
GEP continues growth in Asia-Pacific
A leader in multiple Gartner Magic Quadrants, GEP recently announced that PTT Exploration and Production Public Company Limited (PTTEP) – the petroleum exploration and production company based in Thailand, with operations in 15 countries – has selected GEP SMART procurement software platform.
GEP SMART will enable PTTEP to manage its entire Source-to-Pay (S2P) process by digitally transforming its sourcing activities. This includes spend, project management, sourcing, contracting, catalogue management, guided buying and supplier management.
GEP SMART is a unified, cloud-native source-to-pay platform, built on a data-centric foundation with AI at its core.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”